GMS Inc (GMS)
Solvency ratios
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.32 | 0.37 | 0.38 | 0.45 |
| Debt-to-capital ratio | 0.00 | 0.45 | 0.52 | 0.53 | 0.62 |
| Debt-to-equity ratio | 0.00 | 0.82 | 1.07 | 1.13 | 1.65 |
| Financial leverage ratio | 2.57 | 2.56 | 2.92 | 3.02 | 3.67 |
The solvency ratios of GMS Inc, as indicated by its debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios, have shown improvement over the past five years.
The debt-to-assets ratio has decreased steadily from 0.45 in 2020 to 0.00 in 2024, indicating that the company has been successful in reducing its level of debt in relation to its total assets.
Similarly, the debt-to-capital ratio has also shown a declining trend over the same period, decreasing from 0.62 in 2020 to 0.00 in 2024. This indicates that the company has been able to reduce its reliance on debt funding in relation to its total capital.
The debt-to-equity ratio has followed a similar downward trajectory, dropping from 1.65 in 2020 to 0.00 in 2024. This suggests that the company has been able to decrease its dependence on debt financing in relation to its equity.
Finally, the financial leverage ratio, which measures the company's ability to meet its financial obligations, has also shown improvement over the years, declining from 3.67 in 2020 to 2.57 in 2024. This indicates that the company has become more efficient in using debt to generate earnings.
Overall, the decreasing trend in these solvency ratios indicates that GMS Inc has been strengthening its financial position and reducing its financial risk over the past five years.
Coverage ratios
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.96 | 7.80 | 7.28 | 3.55 | 1.68 |
Based on the interest coverage ratios provided for GMS Inc over the past five years, we observe a fluctuating trend in the company's ability to cover its interest expenses. The interest coverage ratio indicates the company's ability to meet its interest obligations with its operating income.
- In April 2020, the interest coverage ratio was the lowest at 1.68, which may indicate a higher financial risk as the company's operating income was only 1.68 times the amount of interest expenses incurred.
- However, there was a significant improvement in the interest coverage ratio in the following years, reaching 3.55 in April 2021, 7.28 in April 2022, and 7.80 in April 2023. These higher ratios suggest a stronger ability to cover interest payments from operating income.
- The interest coverage ratio peaked at 5.96 in April 2024, indicating that GMS Inc has maintained a healthy level of interest coverage, though slightly lower than the previous year.
Overall, the trend in GMS Inc's interest coverage ratios indicates an improvement in the company's ability to meet its interest obligations over the past five years, with some fluctuations. It is essential for investors and stakeholders to monitor this ratio continually to assess the company's financial health and risk management.